Geffen Firm Said to Settle Case of Sex Harassment : Litigation: An out-of-court settlement of $500,000 is reportedly reached in one suit, but another may be filed.

Geffen Records has quietly resolved a sexual harassment case by agreeing to pay a former secretary an estimated $500,000 in an out-of-court settlement, sources said. The action ends a lawsuit that sparked an industry-wide debate last year about sexual harassment in the record business.

Penny Muck, who sued former Geffen executive Marko Babineau last November for assault and battery and sexual harassment, could not be reached for comment. Muck's attorney, Benjamin Schonbrun, declined comment as did Babineau.

Geffen Records officials in West Hollywood declined comment, but sources said the company admitted no guilt nor acknowledged any criminal wrongdoing in settling the matter.

The news comes as high-ranking officials at Geffen are about to be named in a new $5-million sexual harassment claim being prepared for filing this week, possibly as early as today, in Los Angeles Superior Court by another former female employee.

Former Geffen promotions director Christina Anthony alleged Monday in an interview with The Times that Babineau verbally and physically harassed her during her time of employment between 1984 and 1990--including one occasion, where he allegedly unzipped his trousers and displayed his penis.

She also claims that three top Geffen executives were each personally apprised of the alleged harassment, but did nothing to stop it.

"I was sexually harassed, intimidated and terrorized while working at Geffen Records," Anthony, 44, said Monday. "I personally told three top executives under David Geffen of the abuse and nothing was done about it. Obviously they did not take my complaints seriously. In order to maintain my self-esteem as a professional, I was forced to resign."

Anthony signed a claim against Geffen Records with the California Employment and Housing Commission on Sept. 16, 1991, saying she was forced to resign because of "intolerable working conditions created in retaliation" to her complaints.

Babineau and Geffen officials declined comment Monday on these new allegations. Anthony's attorney, Dan Stormer of the Los Angeles law firm Hadsell & Stormer, said the company has tolerated sexual harassment in the past and continues to act irresponsibly in dealing with harassment complaints.

"Our client was certainly not the first to complain to the Geffen executives about this behavior," said Stormer, whose firm last year won a $3.1-million judgment--the largest in a sexual harassment case--against the Long Beach Police Department. "Despite that, they continued to deal with a man who represents the worst in sexual politics."

The Muck legal dispute--which drew national media attention--was resolved Thursday night after 14 hours of mediation in the Los Angeles office of Deborah Koeffler, a labor relations attorney with the law firm Mitchell, Silverberg and Krupp, sources said. The firm represented Geffen in the case.

Muck, 29, filed her claim on Nov. 15, 1991, charging that Babineau, 41, then general manager of the Geffen Records' DGC label, had repeatedly harassed her, going so far as to masturbate at her desk and physically block her escape.

She also charged that officials at the company had tolerated a long history of complaints about Babineau's "outrageous sexually deviant behavior" by other women on the staff staff--including Anthony.

Geffen officials--who issued a statement last fall that Babineau had resigned to spend more time with his family--acknowledged in March that Babineau was terminated as a result of an investigation into Muck's allegations.

At the time, Geffen attorneys denied that the company had any prior knowledge of the kind of alleged abuse attributed to Babineau in Muck's suit.

Four months after his termination at Geffen, Babineau opened his own promotion company, MJB & Associates in Bel-Air, and has reportedly been hired independently by artist management teams--including at least one that represented an artist on the Geffen roster--to help obtain airplay for their records.

News of Babineau's purported misconduct toward Muck was reported in The Times on Nov. 3, 1991, in an article revealing that charges of physical harassment had been lodged against several prominent top recording industry executives. In that article, Geffen sources said several previous Babineau assistants had lodged similar internal complaints about Babineau dating back to 1984.

Since Muck's suit, women at various record companies have complained about harassment of various degrees, but the only suit filed so far has been by a secretary in June against Warner Bros. Records in Nashville.